The global outbreak of COVID-19 has brought the entire world to a standstill, leaving businesses struggling for survival. The pandemic has made a drastic impact on the business and economic landscape, compelling a sudden shift in the way people work.
This massive shift in the new work-from-home culture or “remote work” is born out of necessity. However, it’s been a long time in the digital transformation era since the rising complexity of business solutions demanded a highly proficient workforce–no matter what the talent location was.
Against this backdrop, creating the right development team of developers, DevOps, and QA engineers is one of the major problems faced by all technology-powered companies.
The hiring process has become extremely slow and prohibitively expensive, which makes the offshore development team an ideal option to choose over in-house team hiring.
This blog deep dives into the world of outsourcing and lists out the top countries for software development services.
Outsourcing = the new normal
The massive shift to the new business model of remote work has pushed companies to dump the old rule book of hiring and switch to outsourced development teams. With offices shut and businesses affected, the popularity of outsourcing has skyrocketed. It is pretty easy to work with the remote team as more data protection solutions and distance work software appeared.
The days are brighter ahead for IT and Business Process Outsourcing.
Benefits of outsourcing
There are some significant reasons, such as immediate and long-term benefits to outsourcing software development:
- Global Talent–In Western Europe and the US, hiring the best developers comes at a premium cost. Thus, many businesses nowadays prefer to outsource software development, i.e., hire a development team based in another country. We are talking about the offshore development team when the chosen country is in two, three, or even ten time zones away from the client. It’s when companies from California hire developers from Ukraine or companies from the United Kingdom hire developers from India. Currently, in the world facing the COVID-19 pandemic, distances and borders mean even less, which opens new horizons for the technological sector and ubiquitous digital transformation. We see many companies understand that remote workers can be efficient and hire offshore development teams with more ease.
- Time Savings–Hiring an offshore development team is always easier and takes less time than starting with in-house developers. All you need is to find a reliable outsourcing partner and choose the most qualified tech talent for your needs. The offshore software development team is usually equipped with all the required stuff and can start working on your project after signing the contract. The process of signing contacts and onboarding remote developers is also typically easy. Moreover, when you hire a completely outsourced team in one company, the developers may know each other or have previously worked together. It also helps to avoid any communication problems from the beginning. If you still want to hire in-house for a long-term perspective, but you need to start working on product development right now, go for a temporary solution and choose staff augmentation not to lose time during the recruitment process.
- Cutting-Edge Technology–One of the significant competitive advantages of outsourcing is access to cost-efficient world-class technologies ensuring your company’s digital transformation. Offshoring to a product development team with the latest technologies, agile methodologies, quality software, and a project management system guarantees a smooth development process and delivers the next-level end-user experience.
- Mitigate Risks–Developing new products with no certainty of success is an inherent risk. It is wise for Startups or SMEs to outsource to a software development company instead of hiring full-time developers to mitigate the risk.
Difference between nearshore and offshore outsourcing
The beauty of IT outsourcing is that you can opt for nearshore and offshore outsourcing countries to get high-quality work and save money. Let’s understand what Nearshore and Offshore outsourcing is and the advantages it offers.
Nearshore outsourcing bridges the gap between offshore and onshore. The outsourcing development company in Nearshoring is located in a neighboring country or proximity.
Nearshore development team offers some significant benefits such as:
- Reduced time zone differences;
- Low labor costs;
- Minor but insignificant cultural differences and language barriers;
- More feasible visits for a transparent working relationship.
Despite the advantages, even the top nearshore software development destinations hold some challenges. So be sure to choose the right one.
On the other hand, Offshore outsourcing means a country located far away from yours, maybe on the other side of the planet. Businesses who prefer quality over location opt for offshore locations where superior quality is delivered at an affordable cost.
Some powerful advantages offered by an offshore software development team are:
- A global talent pool;
- Highly-skilled experts available at lower costs;
- Dedicated IT team to manage a comprehensive range of services;
- High service quality within given timelines.
How to hire the best offshore development team
When choosing a country to outsource a software development team, you should consider the following factors:
- Value instead of cost. Beware of low prices, as they can mean low quality of overseas developers. Read our research to get a better understanding of average offshore software development rates. Keep in mind that the market is overheated, and it is pretty challenging to find the same developer rates as a year ago, especially if you are looking to hire a senior engineer. That is why, if you find a perfect candidate, hire them now, as tomorrow may be already unavailable.
- Reliability. Look for an offshore development team with a proven track record of effective, innovative work. You may check their reviews on Clutch or other listing platforms. Get in touch with the vendor’s former clients to learn about project delivery.
- Portfolio. Check if the vendor or developer worked with the projects in your niche, as it will help with faster onboarding. The number and scope of projects completed by the software service provider may indicate the company’s proficiency.
- Time zone. Make sure that the office hours of the offshore developers will overlap with the head office.
- Culture. Take into account the cultural differences between your country and the offshore country. If you can accept those differences and are sure that they will not affect your collaboration, then go for it.
- English proficiency. Without a doubt, it will be much more productive to cooperate with your outsourced development team when the language barrier is no issue.
A list of offshore and nearshore software outsourcing destinations
These are locations that are the most comfortable for software development outsourcing:
There are nearly 1 million professional software developers in Eastern Europe. Hourly rates of offshore developers in Eastern Europe range between $35 and $62/hour, depending on the developer’s skills and experience and the project’s complexity.
These rates may seem more expensive than in other regions, such as Asia, but they are still much lower than in North America and Western Europe, where software development services can cost you above $100/hour.
Outsourcing software development to Eastern Europe also looks attractive because of the minimal cultural differences between this region and Western Europe and the USA.
The top countries where you can hire an offshore development team are:
- Czech Republic
You might also be interested in reading our post about offshore developers in Eastern Europe: “Software Developers from Eastern Europe in 2023: Which Country Suits Your Project?”. One more vital blog to read if you want to hire offshore developers from this region is “Risks of Offshore Software Development in Eastern Europe.”
If you want to look through the overview of the region, learn more about the potential risks and offshore software development rates by country, you can find in these dedicated posts about Ukraine, Poland, Moldova, Romania, Czech Republic, Hungary, Bulgaria, Serbia.
Find out which trends offer opportunities on the European outsourcing market.
India seems to be a “paradise” for businesses hiring a web development team in Asia. It is also known as one of the most popular outsourcing destinations in the IT industry. With more than 5 million software developers available, India offers relatively low prices of $28-$50/hour for custom offshore software development. The main benefit of hiring tech talent in India is low cost. However, there’s one significant drawback–lower project quality. Besides, time zone disparity and cultural differences can also affect the working process. China follows India, but the rates of Chinese offshore developers are higher, and product development costs can reach $35-$60/hour.
Asia seems to be a paradise for businesses looking to hire a de team for outsourcing. However, the rates of Chinese developers are higher than average.
Other popular countries where it’s possible to hire a dedicated offshore development team are the Philippines, Vietnam, and Bangladesh. Overall, the number of developers in the Asia region reaches about 15 million. The critical destinations for hiring offshore developers are:
- Sri Lanka
Latin America now experiences growth in the software development industry with the best offshore software development countries such as Argentina, Mexico, Brazil, Chile, and Costa Rica. Latin American countries hold a strong impression as one of the most preferred offshoring destinations for US projects.
Offshore developers’ hourly rates in these countries can vary from $40 to $68/hour, depending on the developer’s qualifications. Latin American countries are close to North American clients, with minimum time zone difference, so many businesses in the US prefer outsourcing software development projects to Latin America. Here are the top countries for offshore development in the region:
- Costa Rica
Latin American countries now experience the growth of the software development industry with top locations such as Argentina, Mexico, and Brazil.
The Latin American region is represented by various offshore software development companies focused on working with North American projects and are good at understanding their needs and requirements.
If you’re thinking of hiring offshore developers from Latin America, here is our guide for you: “Offshore Software Development in Latin America 2023”. And more about finding the correct country with the best offshore developers in this region in our series dedicated to Mexico, Brazil, Argentina, Chile, Colombia, Costa Rica, Ecuador, Peru, and Uruguay.
Africa seems to be quite a cheap location to hire offshore developers. In Egypt, Morocco, and Kenya, offshore developers’ hourly rates are less than $30.
Yet, countries such as Nigeria and South Africa are more expensive—they can cost around $40–50, and it can be hard to outsource development teams with a decent price-quality ratio. Overall, there are about 716,000 software developers in the following African countries:
- South Africa
Browse 500+ Dev Teams Available for Hire
The cost of hiring software developers
The cost of hiring dev teams depends on a few factors:
Location: living costs, taxes for business and other law regulations, market demand, currency value make salary rates go up or down.
Experience: senior developers will always get high rates, especially if the developer has completed a significant number of projects and has developed leadership skills. You should keep an eye on the development market, as even juniors nowadays have pretty high rates.
Language proficiency: Developers with a high level of English may receive twice more.
Tech stack: if the company is looking for a rare tech stack or combination of skills, it becomes harder to find a perfect fit, especially if the business wants someone with 5+ years of experience. That’s why the compensation will also be higher due to demand.
Type of employment: hiring in-house, freelance, staff augmentation, outsourcing dedicated teams will have different price ranges depending on the provided services. The initial rates for in-house hiring will always be lower, as information platforms show based salary that doesn’t include taxes, benefits, vacations, office costs, etc.
YouTeam software developer salary rates based on Geography
As we have mentioned above, the country’s economy has a high impact on salary rates. We will compare the hourly rates in the US, Latin America, Eastern Europe, and Asia.
As an example, we will take the rates of senior developers with different tech stacks from our partner vendors on the platform and compare them with the US developers’ rates from Indeed and Glassdoor. In most cases, startups prefer working with high-quality engineers, as they don’t require ultra-detailed management and can work independently. That is why this overview can provide you a good understanding of market prices, and then you can adjust the information to your needs.
Hourly rates of senior developers
Hourly rates of senior developers
Hourly rates of senior developers
How to start offshore development
When looking for an offshore development team and have chosen a destination to hire overseas programmers, the next question you should ask is how to find top offshore software development companies. Unfortunately, the high profits of offshore software development services make them attractive to different kinds of firms. That’s why you need to check on your future offshore software development company. You should consider clients’ reviews, years of experience in the niche, the number of software developers, their specialization, the reputation of the company, and many other aspects.
It’s not always easy to find and analyze this data. In this case, a platform for hiring offshore dev teams, such as YouTeam, can be the best answer to all questions. Only vetted offshore software development companies can get access to the platform and submit their programmers. It means that all engineers available on our platform are hired with a trustful software outsourcing partner that meets all the criteria of a reliable offshore development company.
Also, before starting a project, that would be helpful for you to:
- Estimate time and budget–It would help even on a stage of negotiations with an outsourcing partner to understand the scope of work clearly and to see when you can expect to see the results.
- Define clear goals–To avoid any miscommunication and achieve the results you want, it is essential to write down your goals and expectations, create a full project strategy and discuss it with your offshore development partner at the beginning.
Hiring an offshore software development team: FAQ
How to find the best offshore development team?
When outsourcing product development to offshore destinations, you should consider the following factors—the quality of services, reliability, reviews from past clients, culture and time zones differences, and, finally, English proficiency. Also, beware of too low prices, as they may indicate that the quality of such services is relatively poor.
You will find over a million different types of offshore software development companies across the globe, and choosing one among them is no cakewalk. To ease the process of finding the right outsourcing partner, you can refer to websites that furnish details about the available outsourcing companies and independent contractors or freelancers.
There are specialized websites that evaluate, research, and review top companies in various sectors, including software development outsourcing services such as Clutch or YouTeam. While Clutch allows us to dig deeper into some valuable information like a list of companies according to countries, ranking, hourly rate, case studies, core competencies, reviews, and much more, we at YouTeam operate a unique database of software development agencies from Eastern Europe or Latin America and know which engineers are (1) excellent (we vet every engineer), and (2) available to start a new project soon. YouTeam allows hiring developers from outsourcing agencies directly by talking to them. You skip all the sales talk and also have much lower risks than if you were to work with freelancers.
Suppose you are on the hunt for freelancers. In that case, websites like TopTal, Fiverr, or UpWork can give you an enormous database of independent contractors who are ready to bid for your project at the lowest possible cost for high-quality work.
How to evaluate offshore software developers?
Before you hire offshore developers, it’s essential to evaluate both their tech and soft skills. There are many interview guides for assessing developers’ tech skills. Still, when you work with an outsourced development team, it’s also necessary to understand that the specialists won’t have any problems in remote work and collaborating.
To evaluate if the offshore developer is a good fit for your project, you should ask about:
- Previous experience and background
- A list of technologies the developer prefers to use on projects
- How the developer solves conflicts while working remotely
- How the candidate collaborates remotely with other team members
- Any special techniques to stay focused when working from home
We have also prepared a list of Interview Questions Every CTO Has To Ask When Hiring A Remote Software Engineer in 2022.
How to work effectively with offshore developers?
The effectiveness of the work of an offshore development team depends on implementing the suitable offshore project management methodology, which will coordinate all work processes. Agile methodology is not new and is already used worldwide as a convenient and practical framework for software development teams. Agile offshore software development company achieves a similar level of productivity as co-located teams have, or even higher. Read our how-to guide on the successful implementation of an Agile approach in your offshore development team here.
How to keep your offshore development team engaged?
Engaging remote employees is a continuous process for every employer. One of the most effective ways to boost productivity and engagement is by focusing on communication. As a company, you can set standards for communication in your outsourced development team, do regular check-ins, and rely on various collaboration tools. If you have a team of remote software developers and engineers and want to know more tips, head over to our article about working methods for engaging remote employees.
The Bottom Line
Are you looking for an offshore development firm? We know it is a real headache to find the best offshore software developers. But it’s possible, and it is worth the effort. Suppose you are afraid to make a mistake that will cost you time and money, use our expertise in selecting an offshore software development team. We at YouTeam make it easy and safe to find a perfectly matching team of offshore developers from Eastern Europe and Latin America for any project. Easily hire a vetted dev team and get the work started in days!